Paytm has launched ‘Pocket Money’, a feature that allows teenagers to make UPI payments without having their own bank account. The feature is built on NPCI’s UPI Circle framework and enables parents or family members to give controlled spending access to teenagers through the Paytm app.
According to the company, teenagers can use the feature for payments such as school and college canteens, metro rides, cabs, mobile recharges, and shopping. Parents can set monthly spending limits and monitor transactions in real time.
Under the feature, individual transactions are capped at Rs 5,000, while the total monthly limit is set at Rs 15,000 across the UPI network. The service is available on savings and current accounts, while international payments and cash withdrawals are not allowed.
Teenagers can make payments through their own phones without requiring access to their parents’ devices, OTPs, or QR code sharing on messaging apps.
Paytm has also integrated the feature with its ‘Spend Summary’ tool, which categorises transactions to help families track spending patterns and manage allowances.
The feature includes security controls such as a Rs 500 transaction limit during the first 30 minutes after setup and a Rs 5,000 cap during the first 24 hours. A device lock is mandatory, while parents can modify spending limits or revoke access anytime using their Paytm UPI PIN.
The feature is available on the latest version of the Paytm app on Android and iOS.
Teen-focused fintech startups such as FamPay (now rebranded as Fam), Walrus, and Junio had earlier introduced supervised spending products for minors using prepaid cards and wallets. However, players such as FamPay, Akudo, and Muvin were impacted after RBI restricted co-branded PPI-based UPI arrangements for fintechs that did not hold their own PPI licences. Paytm’s new feature, meanwhile, is built directly on NPCI’s UPI Circle framework, enabling delegated UPI payments without requiring teenagers to open bank accounts.